Dick Smith Holdings | A Assessment Answer

Answer:

Introduction:


Dick Smith recently going by the name Dick Smith Holdings Limited was a widely based consumer electronics retail corporation until 2016 when it collapsed. Dick Smith’s brand ran short of strength and the image under the Anchorage corporation. Dick Smith Limited was noted to have been stacked with small stores and making even worse the stores were in the wrong locations. And the management showed a complete lack of interest in the company's salvation as they saw it as a total wreck and was described as a hundred percentage loser (Bartholomeusz, & Bartholomeusz, 2016). Despite the massive discounts imposed on the company's products on the Christmas Eve as a measure taken by the company to try and turn the excess build up stock into cash to avoid the company's collapse, the situation didn't prove any better as the volume of sales was low and the company fate un-avoided. The company was left with too much unsold and unappealing stock, and this led to a huge loss by the company as it closed down. (Zimmerer, Scarborough, & Wilson, 2005).

Dick Smith founded the Dick Smith Holding in 1968 with only $680. The business started mainly as car radio servicing and installation and expanded to Dick Smith Wholesales and based it on the sale of electronic components. In 1980 the company had grown to a total of twenty stores and Dick Smith sold 60% of the company to Woolworths Limited. A year later he sold the remaining share to Woolworth who took full ownership of the business. Woolworths grew the business by increasing the number of the company’s electronic stores to around 392. The company was operating under brand names like Dick Smith, Move by Dick Smith and Electronics Powered by Dick Smith. By 2012 Woolworths sold the company to Anchorage.

Organizational behavioral issues entail three major themes in which Dick Smith Holding was involved into. These are; communication, change, and conflict. Dick Smith Holding had evidence of change when a report showed that the company had a difficulty in completing the fast moving office sector as a result of a change in preference of the consumers, and the company lost its market share (Davis, & Frederick, 1984).  Its owners, Anchorage, was so much interested in gaining more cash from the sale of the company's share in the Australian stock market than maintaining the company standards and image and continuing its regular sale of electronics. The main goal of provision of quality electronics was changed, and Anchorage saw it as an organization to capitalize in through the floating of its shares. Dick Smith was floated with a market capitalization of $520 million.  Anchorage business did this by writing down the value of the inventory and did a forecast of the future onerous lease payments. They also stipulated the value of the plant and equipment present at the firm. This had an adverse effect on the depreciation charges as it lowered them and made a boost on the bottom line.  This led to the progressive downfall of Dick Smith Holdings till its collapse in 2016 (Jauch, & Glueck, 1988).  There was also the aspect of conflict among the managers and the initial owner of the company where despite the fact that the float was considered the greatest private equity heist in the history of the country it was found to be complete greed and unethical business practice by its founder Dick Smith.  The conflict was also visible when the new owners of Dick Smith had to put in extra cash to fund the business since it had been listed on the stock exchange. This shows that the managers were so focused on generating an increased revenue and profits at the expense of a sustainable growth rate. Lack of proper communication and no action taken was evident when Dick Smith’s managers Anchorage complete lack of interest in the company's salvation after a report was delivered showing that the company was on the losing end. They saw it as a total wreck and was described as a hundred percentage loser (Bartholomeusz, & Bartholomeusz, 2016).  

References

Jauch, L. R., & Glueck, W. F. (1988). Business policy and strategic management. McGraw-Hill.

Zimmerer, T., Scarborough, N. M., & Wilson, D. (2005). Essentials of entrepreneurship and small business management. Pearson/Prentice Hall.

Davis, K., & Frederick, W. C. (1984). Business and Society: Management, public policy, ethics. McGraw-Hill Companies.

(2016). Retrieved 14 August 2016, from https://Dick Smith organization

Dick Smith enters receivership due to bad sales. (2016). ABC News. Retrieved 14 August 2016, from https://www.abc.net.au/news/2016-01-05/dick-smith-enters-voluntary-administration/7067798

Bartholomeusz, S. & Bartholomeusz, S. (2016). Why Dick Smith was destined for failure. Theaustralian.com.au. Retrieved 14 August 2016, from https://www.theaustralian.com.au/business/business-spectator/why-dick-smith-was-destined-for-failure/news-story/6b3c13c9874bb340d2d00e78b866e19a

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